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Monday March 19, 2018

Washington News

House Committee Discussion on Tax Reform

On May 23, the House Ways and Means Committee held a hearing on potential comprehensive tax reform. The hearing was titled, "Increasing U.S. Competitiveness and Preventing American Jobs from Moving Overseas."

Chairman Kevin Brady (R-TX) opened the hearing. He highlighted a bipartisan hope by noting, "Today, we are continuing our work on pro-growth tax reform that will improve the lives of all Americans. This morning's hearing is focused on strengthening American competitiveness and preventing American jobs from moving overseas."

Brady has been advocating comprehensive tax reform for the past two years. He continued, "Americans are being hurt because our nation is saddled with one of the most costly, unfair and uncompetitive tax systems on the planet. According to the nonpartisan Tax Foundation, when it comes to competitive tax codes America is ranked nearly last among our global competitors: 31st of 35."

The Ranking Member on the Ways and Means Committee is Rep. Richard Neal (D-MA). He also supported "reforming our tax code" and recognized the "strong bipartisan support for simplifying our tax system."

Neal continued, "I also believe that a key component of tax reform is ensuring that American businesses remain competitive in the global economy - and that we prevent American jobs from moving overseas. Achieving this includes providing incentives to companies to conduct research and development here in the United States. We also need to improve our nation's infrastructure so that it is in line with other developed nations. That includes meaningful investments to repair and enhance our nation's roads, rail, bridges and harbors."

U.S. Treasury Secretary Steven Mnuchin spoke to the full Ways and Means Committee on May 24. He shared the White House's perspective on tax reform.

Mnuchin stated, "Tax reform will play a major role in our campaign for growth. It has been more than 30 years since we had comprehensive tax reform in this country. We are working diligently to bring tax relief to lower and middle-income Americans as well as make American businesses competitive again."

Editor's Note: These hearings are initial steps toward comprehensive tax reform. Since the last complete reform in 1986, there have been many major changes to the American economy. The general plan for tax reform is to simplify the system by reducing deductions and lowering both individual and corporate tax rates. This will be a long and involved process - especially if the final bill follows the stated preference of Speaker of the House Paul Ryan and Senate Majority Leader Mitch McConnell that a bill should be revenue-neutral. The general goal of tax reform is to encourage job growth while still raising the revenue necessary for the federal government.